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Interview with Dr Craig H. Barratt, President, Qualcomm Atheros
Qualcomm recently completed its $3.1 billion acquisition of leading Wi-Fi chip manufacturer Atheros. Qualcomm Atheros, the new entity, would supplement the company’s existing product portfolio, which would allow Qualcomm to accelerate its expansion into new businesses beyond mobile telephony. In an interview with tele.net at Qualcomm’s headquarters in San Diego, USA, Dr Craig H. Barratt, president, Qualcomm Atheros, talked about the company’s offerings for global markets, future technologies, etc. Excerpts...
How has the acquisition of Atheros benefited the company?
Qualcomm Atheros is a wholly owned subsidiary of Qualcomm, which will focus on network and connectivity solutions. It will add value to the wide area cellular technology space with several wireless and wireline solutions, which Qualcomm has been focusing on for a couple of years. Developing new markets was one of the key objectives of this acquisition. Broadband deployment is growing at a rapid pace and we are looking to develop technologies that will allow data to be delivered to homes and enterprises, and then distributed to devices on the premises.
What does Qualcomm Atheros’s product portfolio comprise?
Qualcomm Atheros has a strong position in several technology segments, especially Wi-Fi, which is used in devices like notebooks, tablets, PCs, gaming consoles, e-book readers and digital cameras. It is also used in TV and set-top boxes to provide local connectivity to homes, enterprises and offices. Therefore, Wi-Fi is a major part of our business. We have shipped hundreds of millions of Wi-Fi devices. Also, the demand for this technology is set to rise. In 2015, Wi-Fi and mobile devices are expected to account for 54 per cent of the IP traffic, while wired devices would constitute 46 per cent. Other wireless technologies offered by Qualcomm Atheros include Bluetooth, Ethernet, power line networks, passive optical networks, and integrated and stand-alone global positioning systems.
Qualcomm Atheros has a strong presence in the Ethernet technology market as well. The technology is used in laptops, radars, set-top boxes, gaming consoles, etc. We are also well placed in the optical networking technology space. In fact, this is an area where the US is lagging behind countries like Japan and South Korea and several ASEAN (Association of Southeast Asian Nations) markets. Given the correlation between economic growth and broadband deployment, governments are taking steps to accelerate broadband growth, and, therefore, the deployment of optical technology-based connectivity is increasing. This is especially relevant to India.
Power line networking is another important business area for us. We have shipped around 50 million chips for this so far. This technology is very popular in Europe and is often used to supplement Wi-Fi connections. In addition, there are networks where both technologies, power line and Wi-Fi, are used in tandem. We are also working on a new communication medium, Hy-Fi (Hy stands for hybrid). The enterprise segment is another important area going forward. Wi-Fi and 4G technologies will be the key demand drivers for this segment.
Who are your key competitors? Where do you stand in terms of the competition?
We have different competitors in various business areas. In most markets, we are among the top two players.
Do you foresee any challenge in terms of market acceptability of your products?
Our products have been well received in the market. However, despite Wi-Fi doing so well, there are several issues and concerns. A major challenge with this technology is interference. Wi-Fi operates in unlicensed spectrum, which implies that anyone can use these frequencies. The issue becomes more pronounced as other devices like baby monitors and microwave ovens operate in a similar band.
However, the good news is that in addition to the 2.4 GHz band in which Wi-Fi operates, an entirely new 5 GHz band is building momentum and is already being deployed in many enterprise wireless LANs. Therefore, one of the likely trends in the Wi-Fi space is that an increasing number of devices will start operating in both bands, instead of just one, which will result in more network capacity and almost no interference.
Moreover, we are expecting the introduction of a new Wi-Fi technology, 802.11 ac, in the next two years. It is a successor to the current-generation technology and is fully backward compatible and operates in the 5 GHz band.
How important are emerging markets like India and other Southeast Asian countries for Qualcomm?
These markets are important for us in two ways. One, they are an extremely important foundation for engineering our capability. So, Qualcomm has several engineering teams in these regions, especially India. In fact, India is our biggest engineering centre. We have large teams in Hyderabad, Bangalore and Chennai.
Another important factor is the commercial opportunities presented by developing markets. The BRIC (Brazil, Russia, India and China) countries are of primary interest in this regard. In India, opportunities in terms of fixed broadband penetration are limited. The country’s wireless broadband penetration is also low.
There is a major opportunity for providing technology capability to these regions, especially India and China, which are probably the two most important regions for us.
How would you compare India with other Southeast Asian countries in terms of business interest?
India can be categorised as a long-term investment as it presents one of the biggest opportunities for the company. The Indian market has high potential in the long term as compared to other regions, but it will take several years to realise it. Infrastructure investment should precede this growth, which will take some time.
What is the future road map for Qualcomm Atheros?
The next generation of networking technologies will significantly change the global communication space. We expect the new 802.11 ac and the 802.11 ad standards to make their presence felt.
Besides, hybrid networks will be established in all homes, hybrid location technology will see widespread use, and the smart home and smart grid concepts will gain acceptance.
Our vision is to enable a seamless service experience for users. This would require us to ensure ease of use and an affordable cost structure. From the user perspective, we want a future where people can connect to anyone and access any information, services or applications, including movies, personal or public information from the cloud, etc.
While substantial progress has been made in this regard, a lot more needs to be done. Five years ago, our focus was on providing basic connectivity, for example, email. Now, it has shifted to media – for movie streaming, TV viewing, etc.
Today, we have evolved from basic connectivity to consuming and distributing content. This may well be a new wave of development. It includes everything, from security to monitoring and managing energy consumption. Therefore, instead of having one or two connected devices at home, the user will have all the devices connected. This implies a reduction in the workload, which leads to greater energy efficiency.
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